Payne: Cash for Clunkers big tax hike ( The Michigan View 12.23.10)

Posted by hpayne on December 23, 2010

St. Louis – “SUVs’ comeback means bigger tax bills for some,” screamed the headline on the front page of the St. Louis Post-Dispatch December 23, and taxpayers in the Show Me State are livid.

Here (and in other states like Virginia and South Carolina), taxes are levied on personal property, and – thanks to Nancy Pelosi’s destruction of thousands of used SUVs under the 2009 Cash for Clunkers bill – the prices of used cars are actually rising as light truck sales make a comeback.

“The personal property tax on Lisa Kamper’s Saturn Outlook was $443 this year, about $65 more than she paid last year. The 2008 sport utility vehicle had increased in value — by nearly 13 percent,” writes Post-Dispatch reporter David Nunn. “Tony Lucia’s 2007 Dodge Ram is costing him more this year, too. Its value surged by 8 percent, his taxes by $41.”

Both cars are a year older, and, by conventional wisdom, should have lost value, costing their owners less. But when U.S. House Speaker Pelosi ordered the destruction of all vehicles she and her Democratic colleagues deemed “gas guzzlers” a year ago, it distorted the used car market for SUVs.

Now, with SUVs a hot ticket again – sales are 53 percent of the market despite Pelosi’s efforts to “green” the industry – demand is outstripping supply.

“The market values of many used trucks and sport utility vehicles have risen, for the first time in memory,” says the Post-Dispatch, resulting in “hundreds of complaints from truck and SUV owners with ballooning tax bills” in cities like St. Louis.

Car sales plummeted to 10 million vehicles in 2009 at the same Pelosi declared SUVs enemies of the planet and targeted them for destruction when traded in for a Washington-approved fuel sippers. For the first time ever, more vehicles were scrapped than built.

Now, SUVs are back and buyers are willing to pay for the limited supply.

“On some vehicles, we’re talking like 20 percent increases,” Jonathan Banks of the dealers association’s Used Car Guide told the Post-Dispatch. Car prices, he says, have increased by 3 percent nationally – but big SUV prices have soared by nearly 10 percent.

Large trucks like Chevy Tahoes or Ford Expeditions that are 1-5 years old went from $17,300 in late 2007 to about $23,500 this year. Some indexes, says Banks have put used-car prices at their highest levels ever.

“St. Louis city officials said it was the first time they had seen used cars increase in value,” reports the Post-Dispatch. The result is bigger taxpayers and angry phone calls from confused residents.

But it’s not Missouri officials they should be blaming. It’s soon to be ex-Speaker Nancy Pelosi.

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